Jingdong Said to Plan $2 Billion IPO for Second Half

A woman uses her mobile phone in front of an advertisement of Beijing Jingdong Trading Co.'s JD.com in Jinan. Source: Imaginechina

Jan. 16 (Bloomberg) -- Beijing Jingdong Trading Co., the
Chinese online retailer backed by Saudi Prince Alwaleed bin
Talal, plans to raise about $2 billion in an initial public
offering in the second half, three people with knowledge of the
matter said.

The Beijing-based company is working with Bank of America
Corp. and UBS AG, said the people, who asked not to be
identified because the details are private. Jingdong is leaning
toward a U.S. listing, although Hong Kong is another potential
IPO destination, they said.

Jingdong is planning the biggest U.S. initial offering by a
Chinese company in more than a decade, taking advantage of
government policies aimed at bolstering e-commerce. It wants to
avoid listing at the same time as a potential IPO of Alibaba
Group Holding Ltd., China’s largest e-commerce company, two
people said.

“The timing is good as China has unveiled policies
supporting the growth of information technology-driven
consumption,” said Ricky Lai, a Hong Kong-based analyst at
Guotai Junan Securities Co. “More and more people in the
country are shifting to online shopping from traditional ways.”

The proceeds will help Jingdong expand in an e-commerce
market that will be worth $395 billion by 2015, according to
McKinsey & Co. Alibaba, which has been valued at as much as $190
billion by analysts, plans to go public in 2014, people with
knowledge of the matter said in October.

IPOs Rally

Chinese companies raised $907 million from first-time share
sales in the U.S. last year, more than five times the amount in
2012, data compiled by Bloomberg show. 58.com Inc., which runs a
Craigslist-like online marketplace, has jumped 146 percent since
an October IPO. Qunar Cayman Islands Ltd., a Chinese travel-booking service, has gained 89 percent since listing in
November. The Bloomberg China-US Equity Index of the most traded
Chinese stocks in the U.S. has gained about 26 percent from a
low last June.

A Jingdong spokesman declined to comment on the IPO plans
yesterday.

The company was founded by Chief Executive Officer Richard
Liu in 2004. Its offering will be the biggest by a Chinese
company in the U.S. since China Life Insurance Co., the nation’s
largest insurer, raised $3.3 billion in December 2003.

Internet Population

Online retailing in China grew at an average 120 percent
each year from 2003 to 2011 and is projected to more than triple
to $395 billion from 2011 to 2015, according to a McKinsey
report in March. China has 591 million Internet users, more than
the entire population of any other country except India,
according to the government-run China Internet Network
Information Center.

China could have more than 850 million Internet users by
2015, according to the Ministry of Industry and Information
Technology. E-commerce transaction volume could reach 18
trillion yuan, and online could account for more than 9 percent
of total retail consumption, the ministry said.

Billionaire Alwaleed bought a stake in Jingdong in February
last year, joining a group of investors in tapping one of the
world’s fastest growing e-commerce markets. Jingdong raised
about $700 million from the Alwaleed-controlled Kingdom Holding
Co., Canada’s Ontario Teachers Pension Plan and some existing
major shareholders, the company said at the time.

Other backers include billionaire Alisher Usmanov, who
invested in Twitter Inc. and Facebook Inc. ahead of their
listings and is also a shareholder of Alibaba. Usmanov, Russia’s
richest man, expects “at least double returns” from his
Jingdong investment, the chief executive officer of his holding
company said in June.